doing small things in a big way
ISSUE 1
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‘‘How much would you pay me for an idea in my head?’’ SME Connect explores the technology start-up ecosystem in Qatar – what’s working, what’s lacking and where is it going? Ayswarya Murthy talks to techpreneurs in the country.
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The power of why
constant reinvention
Branding and future trends in SMEs are emerging as a more inner-directed expression of desires based on a person’s sense of self, rather than on the traditional principles of needs and wants, Anthony Ryman writes.
Thought leader, entrepreneur and speaker Dr. Alexander Osterwalder talks to V L Srinivasan about his business model inventions, the need to renew business models to stay afloat and the importance of social entrepreneurship.
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Access to finance
Use SMEs to nurture local talent
Commerce on Facebook
The SME contribution to Qatar’s GDP and employment is very low. What are the problems for SME start-ups here? David Mason discusses the various issues and challenges faced in Qatar.
SMEs are not just a showcase and the GCC governments’ stance that they should employ locals is justified, says Nick Edmunds.
Social commerce is inevitably going to drive the future of social media companies says journalistturned-entrepreneur Sramana Mitra.
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Automation helps
Start-ups, Rise and Shine!
Designer way
How cloud computing can change the functioning of small and medium enterprises across the world and prevent them from succumbing to manpower attrition? Rajesh Butta explains.
As Qatar is keen to develop the non-hydrocarbon sector, there are a plethora of opportunities for SMEs to grow, feels Grant Kirk.
Ibrahim M Jaidah, the pioneer of a new architectural movement in Qatar, tells his story of success to Sindhu Nair.
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Driven by design Rabih Ghandour, CEO, Fanta addict, coding prodigy and day-dreamer among other things, talks to Ayswarya Murthy about his e-commerce website Wamli, a marriage of geeky charm and cutting-edge design.
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Plethora of opportunities SMEs form the crux of Qatar’s diversification plan in moving to a knowledge-based esconomy, V L Srinivasan writes.
Publisher & Editor-in-Chief Yousuf Jassem Al Darwish Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman
// from the desk
editorial Editor Sindhu Nair DEPUTY EDITOR v L Srinivasan SENIOR CORRESPONDENTS eZdhar ibrahim abigail mathias ayswarya murthy
SME Connect finds that there is a strong urge among Qatar’s young generation to partner in the progress of the nation. They are looking for some more policy directions from the government to realise their dreams. SME Connect provides a glimpse into the various stages of entrepreneurship and answers some of the questions that are raised by prospective entrepreneurs.
art senior Art Director Venkat Reddy deputy Art Director Hanan Abu Saiam assistant art director Ayush Indrajith senior Graphic Designer maheshwar reddy Photographer Robert F ALTImirano
The cover story of SME Connect analyses the eco system of technology start-ups in the country and delves into details of how their future is going to shape up in the coming years and techpreneurs share the experiences in launching their ventures. An 11th grade student is just waiting to turn 18 to become eligible for bank funding and deal with legal and other issues is an ample evidence of how serious the youth want to take advantage of the rapid strides Qatar is making in various fields. SME Connect also brings the success stories of Qatari entrepreneurs like Ibrahim M Jaidah and Rabih Ghandour.
marketing and sales senior Manager – Marketing Zulfikar Jiffry ASSISTANT MANAGER – MARKETING THOMAS JOSE senior Media ConsultantS HASSAN REKKAB LYDIA YOUSSEF MARKETING RESEARCH AND SUPPORT EXECUTIVE KANWAL BALUCH
Dr Alexander Osterwalder from Switzerland underscores the need for upgrading the business models to stay afloat in the businesses, company formation specialist Grant Kirk in Qatar talks about the opportunities and how the budding entrepreneurs can exploit them. How facebook is helping ecommerce go miles is fairly elucidated by founder of One Million by One Million (1M/1M) Sramana Mitra while India-based serial entrepreneur Rajesh Butta explains about office automation and how it helps the new businesses. The importance of branding for local SMEs is touched upon by branding expert Anthony Ryman. Organisations like Silatech, ictQatar, Enterprise Qatar and others are encouraging the start-ups while Qatar Development Bank has been specially initiated for this sector. What then are the challenges of this small segment of business? This is one question that we will keep addressing in our coming issues. So all the budding entrepreneurs’, be on the lookout for SME Connect as we help realise your goals through answering all the questions you had in mind.
senior Accountant Pratap Chandran distribution Sr. Distribution Executive Bikram Shrestha Distribution Support Arjun Timilsina Bhimal Rai basanta pokhrel
Happy Reading V L Srinivasan Published by Oryx Advertising Co WLL P.O. Box 3272; Doha-Qatar Tel: (+974) 44672139, 44550983, 44671173, 44667584 Fax: (+974) 44550982 Email: qtoday@omsqatar.com website: www.omsqatar.com Printed at: Gulf Publishing and Printing Co WLL Copyright © 2013 Oryx Advertising Co WLL
TOP SLOT
Paypal’s helping hand Paypal’s new Start-up Blueprint programme is cutting new entrepreneurs some slack with mentorship, customer service and free payment processing. PayPal Startup Blueprint is planning to partner with startups incubators, accelerators and VCs around the world to help out new companies specialising in information and communication technologies. Currently the payment processing giant has tied up with three entities; London-based Seedcamp, 500 Startups in California and Elevator based in Tel Aviv. Companies nominated by these tech-incubators (or those selected by the company itself ) will be eligible to receive free processing on transactions during the first 18 months of their participation in the programme (or up until PayPal has covered $50,000 worth of transaction fees) and “the kind of ‘white glove’ support large companies like British Airways get, offering them a named, local contact at PayPal who will manage their account and help with their business models, plus access to startup mentors and evangelists,” John Lunn, global director of PayPal’s developer network, told the Guardian. With the PayPal planning to partner with more accelerators and VCs around the globe, more tech startups will be invited into the programme with only eligibility criteria being that they should be privately held and should generate less than QR11 million ($3 million) annual revenue.
kickstarting a revolution The crowdfunding service Kickstarter reported that the company has now funded over 50,000 projects, raising nearly QR3.64 billion ($1 billion) in donations from over 5,000,000 individual backers since its founding in 2009.
50,000 funded projects
5,000,000
donations from individual backers
Believe in your idea In the movies, you want a good story and characters that are honest, but you are also looking for a good director who can lead the ship. That’s how we look at business. Everybody has a great idea for a start-up, and so do their relatives, and they tell me, ‘You gotta build it.’ I say, ‘I have to believe in it.’ Ashton Kutcher, Actor
Getting your priorities right “Your reputation is more important than your paycheck, and your integrity is worth more than your career.” Ryan Freitas About.me co-founder
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Forget all that you know In a start-up company, you basically throw out all assumptions every three weeks. William Lyon Phelps, author
VC transactions in MENA steadily increasing MENA Private Equity Association released a report that sheds light on the startup scene in the region. According to the 3rd Venture Capital in the Middle East and North Africa Report, despite the global financial crisis and the more recent political instabilities, overall, the venture capital industry continues to experience an upward trend in deal activity. From 2009 to 2012, 119 VC transactions and 234 private equity transactions were completed with Tunisia, Morocco and Lebanon leading the region in terms of sheer volume. IT and software continued to remain the most popular among investors. number of vc transactions since 2006
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sector concentration by volume (2010 to 2012)
Guiding you through the entertainment maze With thousands of movies and TV shows available at the click of a button, what will you be watching this evening? Foundd helps you choose. Foundd helps you narrow down content by analysing your taste in entertainment and curates a list that you can watch on Netflix or iTunes. First timers on the app or the website are asked to rate their favourite TV shows and movies to help the engine learn your preferences. You can see what your friends are watching and the suggestions made for them. If you are planning to watch something with your friends or family, you can request for recommendations based on the interest of the whole group. You can add up to five people onto a list and the engine will list content that broadly covers the tastes of all of them. Foundd has been downloaded 200,000 times and 95% of the users prefer the app version. With QR1.27 million ($350,000) raised from angel investors, Foundd also earns 7% of iTunes sales and QR43.7 ($12) every time a user signs up for a free 30-day Netflix trial.
others 14% agriculture 4% services 5% information technology 47%
media 5%
f&B 8%
teleco 8% industrial manufacturing 9% country concentration by volume (2010 to 2012) others 8% tunisia 23%
jordan 3% UAE 7%
egypt 13% morocco 22%
lebanon 21% 10
Source: zawya private equity monitor
TOP SLOT
Teamwork 101 “If you can’t feed a team with two pizzas, it’s too large.” Jeff Bezos Amazon founder and CEO
mena's best e-content winners The World Summit Award, an initiative of the UN World Summit on Information Society (WSIS) honoured eight progressive, innovative and sustainable e-Content projects from around the world. e-Content start-ups from Germany, China, Argentina, Iceland, France and Finland were also among the winners at the World Summit Awards. At the birthplace of the Arab Spring, Tunisia, citizens were eager to participate in and nurture their hard won democracy. One of the start-ups, Marsad in Tunisia, provides open data to inform citizens about what their elected law makers are doing – their voting records, participation and media coverage – using high resolution and dynamic graphics and chart. Started by two young women, the site makes available free of charge discussions, voting records, legislation and budgets and seeks to “take advantage of ICT to promote political journalism”. In Ghana, Infoline, a narrow band mobile and web service, connects consumers and businesses in a continent where internet penetration is quite low. It works well with low-technology mobile phones that are largely used in the country and offers relevant business information via SMS, similarly to how technologically advanced consumers would use search engines on the Web, going around the limitations of the lack of internet. 12
The Kingdom calls ArabNet Riyadh 2013, which is scheduled for this December, will bring together digital professionals and entrepreneurs from Saudi Arabia and the region. The event will host over 80 speakers from across the region and the world, and attract over 800 digital professionals to connect and network between December 3 and 4. The gathering will focus on digital Arabic content development in the GCC and Saudi market; mobile apps, trends and habits; brand management and advertising; commerce, entrepreneurship and more. But the exciting bit of the 2-day conference, undoubtedly, will be its staple entrepreneur competitions - Startup Demo and Ideathon - opening the stage for entrepreneurs to showcase their promising companies and creative ideas. For functioning startups, that are less than two years old, has less than 10 employees and less than QR3.64 million ($1 million) in investment, Startup Demo is the perfect platform to present the company to a panel of high-profile investors in the region. If the company is still in the ideation stage, apply to Ideathon.
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Unique retail business model for Myanmar Ooredoo and the Cherie Blair Foundation for Women are developing a franchisee model to enable 30,000 women to become entrepreneurs by selling prepaid Ooredoo airtime to their communities by 2016. As per a recent announcement, this innovative new partnership will extend the benefits of mobile technology to underserved communities and support women’s entrepreneurship in Myanmar where less than 10% of the population possess a cell phone. Each of the women will be equipped with a business kit containing a mobile phone, promotional materials, and an operating manual. They will also receive hands-on training on how to run their businesses. According to a research conducted by the Cherie Blair Foundation for Women, women entrepreneurs can add significant value to the operations of mobile companies as agents in their retail channels, selling products such as SIM cards and mobile airtime.
Numbers say it all
ICT Report 2013 indicates that as per 2010 Qatar Statistics Authority census data and AMRB estimates, there are 30,793 business establishments in Qatar employing 1,037,023 people. Small businesses (defined as those having 1-9 employees) represent 70 % of all companies in Qatar, but employ only 7 % of the workforce. In contrast, very large establishments (defined as those with 250 or more employees), employ 57 % of the workforce, but represent only 2 % of establishments. Together, small and mediumsized businesses (with up to 49 employees) constitute more than 90 of the total businesses in Qatar.
More people choose to be in A job than self employed Interesting results have come up in a recent survey done by Bayt.com and YouGov, a research and consulting organisation indicating a clear preference of people in Qatar for being employees rather than self employed. Some 42% of the respondents said that given a choice they would explore possibilities of entrepreneurship as opposed to 50 % who prefer to be employees. The top reasons for this preference being chance to learn new skills and techniques (39 %), regular income offered by a salaried job (32 %) and fixed working hours (28 %). For those who prefer an entrepreneurial career, personal fulfilment is the primary reason (50 %) followed by freedom to chose their own work life balance (43 %) and ability to give back to the community (43 %).
employing
30,793 1,037,023 business establishments in Qatar
people
Challenge
Youth
On the Enterprise Challenge Qatar 2013, Qatar Shell CSR Advisor, Sheikh Khalid Al Thani says, “We created a competition to encourage students and universities to do more. The challenge equips young people with practical business skills developing their business acumen, team work and strategic thinking”.
Sasol and Bedaya Centre come together to benefit SMEs Sasol and Bedaya Centre for Entrepreneurship and Career Guidance have signed a memorandum of understanding to cooperate on providing technical business support to Small and Medium Enterprise development in the chemical, energy and related sectors in Qatar. The MoU builds on Sasol’s support for Enterprise Qatar’s Al Fikra initiative earlier. Bedaya Centre will identify and refer entrepreneurs and SMEs working in the chemical, energy and related sectors. Sasol will impart its SME development experience, knowledge, best practices to the SMEs. Bedaya will also provide business support to the entrepreneurs, including business plans, feasibility studies, market analysis, marketing strategy and operational plans. The MoU is seen as another positive step towards the growing involvement of the community and industry in supporting entrepreneurship in Qatar that is being stated as the ‘backbone’ of a flourishing and diverse economy.
Region’s youth up for tech challenge Silatech and Pearson are calling on tech-savvy, potential entrepreneurs under the age of 30 in the MENA region to showcase their technical and entrepreneurship skills through the Arab Mobile App Challenge, part of the world’s largest competition for mobile app design and development. The competition has been brought in the region for the first time by Silatech in an effort to foster innovation among the youth. The Arab Mobile App Challenge is part of the annual, global Mobile App Challenge run by the United States’ Applied Innovation Institute. The need to promote technological talent and channelise the potential of the youth into a diverse income generating activities is being strongly felt in the region, as in Qatar. Encouraging successful new start-up businesses will have the dual effect of fuelling the private sector and generating new jobs. The competition finalists from across the Arab world will be selected to compete in the regional final, which will be held in Qatar in February, 2014. Winners from the MENA region will also have their costs paid to attend the international finals of the competition to be held at the Mobile World Conference in Barcelona. 14
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QNB’s Business Banking to boost SME growth
Start-ups recognise ICT as an essential business tool
QNB has launched its innovative Business Banking programme that will enable all current and future business owners to expand or start a business by granting them easy, convenient and quick access to finance their small to medium businesses. The product will act as a one-stop shop to meet all the business needs of the SMEs irrespective of the sector’s requirements.
The ICT landscape survey 2013 found that start-ups have better basic ICT infrastructures than business establishments overall, including computer and Internet penetration. There are also signs that these new companies are investing in resources to enable adequate use of that infrastructure, such as the fact that they employ a significantly higher percentage of skilled in-house technology professionals than businesses across the board, whether they are ICT-related start-ups or not.
Is your business idea feasible? GEW promotes start-ups Qatar celebrated Global Entrepreneurship Week from November 12-18, 2013. Hosted by Silatech and backed by a powerful board, the event will provide an opportunity to link with an established worldwide network in order to advance skills such as problem solving, creativity, and resourcefulness. The event will promote entrepreneurship in Qatar through a series of workshops, activities and seminars working with a wide range of organisations both in the public and private sector.
Enterprise Qatar’s latest initiative ‘Jadwa’ offers subsidised feasibility studies for new entrepreneurs and SMEs in Qatar. Through ‘Jadwa’, consultancy services, specifically feasibility studies and support services will be provided in cooperation with qualified professional service providers, EQ has said. 70% of the consultancy services cost will be subsidised whereas the applicants will express their commitment by covering 30%. This service target two main categories - entrepreneurs in the idea stage and SMEs who are looking to expand or diversify their products and services - to help them develop sustainable businesses. EQ’s CEO Abdulaziz Al Khalifa said: “We are keen to provide Qatari entrepreneurs with the direct guidance and consultancy, through professional experts and under our supervision, to guarantee viable studies and active contribution from the entrepreneurs. Our dynamic style will assist Qatari entrepreneurs to ensure their ideas are viable through the help of expert opinions, and come out with the best results.” SME CONNECT | ISSUE 1
catch up
Business Models have to be constantly re-invented By V L Srinivasan
Dr
Alexander Osterwalder is an entrepreneur, author, speaker, global thought leader, workshop facilitator and adviser on the topic of business model innovator and needs no introduction. His action-oriented plan to strengthen the business models is admired and applied by entrepreneurs and organisations all over the world to gain advantage and he is considered the Guru of business modelling. His Business Model Canvas, a tool to visualise, challenge and re-invent business models, is used by leading organisations around the world like GE, Nestle, Mastercard, P&G, Ericsson, 3M, IBM, Telenor, Capgemini, Deloitte, Logica, Public Works and Government Services in Canada and others.
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In an exclusive interview to SME Connect, he explains his business model inventions, the need to renew business models to stay afloat and the importance of social entrepreneurship. Tell us more about “Business Model Innovation” and ‘Business Model Canvas’. Business Model Innovation is basically the process of creating value in new ways for customers and companies. The Business Model Canvas is a visual and practical business tool that enables you to rapidly map existing or design new business models. It is often used, but not only, to come up with innovative business models. In other words, it helps executives and entrepreneurs think beyond product and technology innovation. We are stuck in product and technology thinking, yet
Dr Alexander Osterwalder Thought leader and founder of Business Model Foundry Together with Professor Yves Pigneur from the University of Lausanne in Switzerland, Dr Osterwalder co-authored Business Model Generation, a global bestseller on the topic of business model innovation. He is a frequent keynote speaker and has addressed business leaders and entrepreneurs in top universities around the world including Stanford, Berkeley, MIT, IESE and IMD. The Business Model Foundry, his current start-up, is building strategic tools for innovators. Strategyzer.com and the Business Model Toolbox for iPad are the Foundry’s first applications. Dr Osterwalder is a recipient of the Innovation Luminary Award 2013 awarded by the EU Open Innovation Strategy and Policy Group. He is also a founding member of The Constellation, a global notfor-profit organisation aiming to make HIV/AIDS and Malaria history.
More about the author
competitive advantage increasingly comes from superior business models. What makes a business model successful in an existing business environment? It’s pretty simple and hasn’t changed over the decades: The entire model should focus on tackling real customer needs with a scalable and profitable approach. What has changed is that business models expire faster than ever before, like a yogurt in the fridge. Hence, a big part of success is the ability to continuously review and renew your business model. Dell had an innovative business model, but they failed to reinvent themselves. Kodak invented digital photography, but went bankrupt because they failed to understand they didn’t have a business model for it, etc. How does the Business Model Canvas help prospective entrepreneurs in this country? The Business Model Canvas can help business people in any country in several ways: For examp le, simply by providing a thinking structure to turn ideas into real business models that go beyond technologies or products. The Canvas is also often used as a shared language to get everybody aligned and to assure proper implementation. In another context it helps investors understand a business model they might want to invest in. Or in a very different context the Canvas can help in Mergers & Acquisition. I am always surprised by how many different use cases there are for the Business Model Canvas. How does one create a value for a business, particularly for the start-ups, in a businessoriented country like Qatar? You talk about nine building blocks. What exactly are they? These are the nine basic questions you need to ask yourself to build a business. They represent the blue print of your strategy. What was the response to the BMI and BMC that has been put forth by you and how many companies have tasted success by implementing them? The success has blown us away. There are now close to a million copies of Business Model Gen-
eration in circulation in more than 26 languages. Companies like GE, Nestle, Mastercard are using it, just as much as start-ups or Small and Medium Enterprises. For instance, when Nestle launched Nespresso machine, they adopted a different business model by selling single portioned espresso coffee to the customers directly for the first time and it was successful. They went ahead with a slightly different business model innovation and introduced another machine “Dolce Gusto”. You say businesses which do not adapt to change will struggle to survive. Ca you please elaborate? This applied to any business. What happened to Dell or Kodak can happen to anybody. What we already experienced in the music industry is now happening in the pharmaceutical industry: their business model has expired. Any business is started with an intention to make profits but you advocate new tools to come up with business models that look beyond profit. What does that mean? There is a new breed of entrepreneurs who strive to make a profit and change the world at the same time. An interesting example is a start-up called Peepoople. They are addressing the global sanitation problem because 2.6 billion people don’t have proper access to sanitation. They are aiming to do this with a profitable business model that creates value for some of the poorest people in the world, because it creates value for them. Another great example is SunEdison in the US. Jigar Shah, an entrepreneur, changed the face of the solar energy with a business model innovation. We’ll see more such great examples in the future. What is your advice to the young and upcoming entrepreneurs around the world? Experiment as much as you can and accept failure as a part of the journey. If you have never failed, you have probably never tried to do something interesting or big. What is important is that you keep your failures relatively cheap and learn from them relentlessly.
“A big part of success is the ability to continuously review and renew your business model. Dell had an innovative business model, but they failed to reinvent themselves. Kodak invented digital photography, but went bankrupt because they failed to understand they didn’t have a business model for it.” SME CONNECT | ISSUE 1
ideation
Plethora of Opportunities for SMEs Small and Medium Enterprises (SMEs) form the crux of Qatar’s diversification plan in moving away from resourced-based economy to a knowledge-based one. Policy makers are looking at various options to encourage the sector in the face of the world economic transformation. By V L Srinivasan
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esides financial institutions like banks, which have earmarked funds to develop local industries, the government has started organisations like Enterprise Qatar (with a capital of QR2 billion) and Silatech to promote entrepreneurship among the youth in the Arab world while educational institutions are contributing their mite by setting up business centres for prospective entrepreneurs, ensuring that the contribution of non hydrocarbon sector to Qatar’s GDP grows unhindered. Qatar Foundation (QF) and Qatar Science and Technology Park (QSTP) are leading the way in
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promoting the sector through technological innovations while Qatar Exchange launched QE Venture Market nearly two years ago, exclusively to cater to the needs of the SME sector and also to develop Qatar as a centre of excellence and hub for SMEs in the GCC region. Silatech has been in the forefront in implementing various programmes for start-up businesses and budding entrepreneurs not only in Qatar but in 13 of the 22 nations in the Arab world. “We have programmes ongoing in 13 countries, and we’re gradually expanding to serve young people throughout the entire region. So if we look
at improving the climate for entrepreneurship and startup business success, we have a variety of “tools in the toolbox” that we can employ with local partners,” Stephen Brannon, Director of Communications at Silatech, says. Silatech’s strategy of enterprise development includes interventions along all stages of the “enterprise ladder”, starting at the bottom with youth savings schemes, financial literacy training, and loans for young micro entrepreneurs. “Moving along this ladder, we help provide entrepreneurs with access to training, guidance and mentorship programmes, and other types of technical assistance and business development services. At a higher level, Silatech collaborates with reputable public and private sector financial partners to invest in country-level SME equity funds in selected countries. Within each country, a diverse portfolio of SMEs in high growth industries receives investment designed to spur job creation. Our strategy focuses on improving three types of access for the entire range of enterprises – access to finance, access to business development services, and access to markets,” Brannon says. It is not that Qataris lack the zeal but a proper policy framework is need of the hour. The SME sector is expected to gain pace in the coming months as the government has been implementing various mega infrastructure projects. “The Qatari market currently offers vast opportunities ahead of preparations for the World Cup in 2022 and they can be leveraged to unlock entrepreneurial activity in the country. The population is expected to double in the next ten years, which creates opportunities in all sectors,” Tareq Coury, Research Programme Manager and Senior Economist at Silatech, says. “Unlocking this growth potential, however, requires a policy framework that encourages entrepreneurial activity. This implies rethinking of company laws to lower barriers for entry of foreign entrepreneurs, as well as innovative ways to unlock capital for small and medium-sized enterprises. SMEs require forms of financing that evolve across their lifecycle, and entrepreneurs regularly cite access to financing as one of the main impediments to achieving their growth potential,” Coury says. Brannon too agrees that there is a lot that governments should do to lower the levels of risk for start-up entrepreneurs. “One clear way to do this, in the opinion of many, is to decriminalise bankruptcy. When the penalty for failure carries the possibility of prison time, this obviously acts as a deterrent to entrepreneurship,” he says. Locally, retail, food and beverages and real estate redevelopment continue to present some of the significant business opportunities for locally-based entrepreneurs and land owners. This is the result of a growing and increasingly rich local and expat community. According to Coury, Qatar’s new international
“The Qatari market currently offers vast opportunities ahead of preparations for the World Cup in 2022 and they can be leveraged to unlock entrepreneurial activity in the country. The population is expected to double in the next ten years, which creates opportunities in all sectors.” Tareq Coury Research Programme Manager and Senior Economist, Silatech
airport, seaport, and upcoming railway will be integrated to a wider GCC transportation network at the regional level. “This should allow entrepreneurs to plug into regional supply chains. Opportunities continue to develop in sectors downstream from oil and gas. While this effort is government-led, opportunities exist for entrepreneurs to exploit niche regional markets,” he says. In the non-oil and gas sector, retail prices for intermediate goods used locally in all sectors (from property to auto repair) suggest significant opportunities for local production of intermediate goods using capital-intensive forms of production. For this to work, however, entrepreneurs need to have greater access to capital. “If successfully implemented, the regional transportation network, combined with a growing logistics and warehousing capacity, could allow entrepreneurs to tap into this lucrative regional market,” he says. “Currently, expatriates have to find a local partner to incorporate their businesses. But development plans for Qatar call for the creation of three economic zones, located to the south of Doha and clustered around Doha’s new international airport, it’s nearly completed seaport and the industrial area,” Coury says. These economic zones are important opportunities for both Qatar’s economic development and for entrepreneurs looking to tap into this growing market. Entrepreneurial activity will benefit from Qatar’s growing infrastructure to reach regional and global markets. “Qatar’s focus on developing its banking and financial sector will benefit from a banking regulatory framework that recognises the growth potential of expatriate-led SMEs, and tailors corporate lending rules to allow these SMEs greater access to local capital,” he adds. On their part, Qatar National Bank, Qatar Development Bank, Commercial Bank of Qatar and SME CONNECT | ISSUE 1
“You need to do the proper research and preparation. One can always benefit from the experiences of others, so it is important to find a good mentor who has already been through the process and is familiar with the business sector, so you can avoid beginners’ mistakes. Do your homework, and learn from others.” Stephen Brannon Director of Communications, Silatech
others have initiated several schemes to help the 25,000+ SMEs in the country. While QDB has launched Al Dhameen, a scheme to provide financial assistance to SMEs, the Commercial Bank of Qatar has launched an online trade portal for SMEs and large corporates besides its dedicated unit for SMEs ‘Enterprise Banking’. Qatar National Bank has introduced ‘Business Banking’, a start-up friendly scheme more than a month ago. Qatar Islamic Bank is not lagging behind and has launched Aamaly, a scheme for SMEs, by allotting QR1 billion early this year. QNB’s Group Corporate & Institution Banking General Manager Abdulla M Al-Khalifa says, “Business Banking is tailored for SMEs and offers a comprehensive package of business solutions that meet the needs of all enterprises and businessmen. Under this programme, all commercial and industrial companies at various stages of development will find a helping hand to start up or expand their activities and to benefit from the ease of financing opportunities for all their business endeavours.” However, teething problems are nagging the sector which needs more access to funds and 20
other concessions including availability of land to improve its contribution to Qatar’s non-oil GDP, which is around 15% at present. The prevailing confusion over definition of an SME is also said to be one of the issues bothering the sector. If these issues are sorted out, the sector would have bountiful of opportunities in view of the FIFA World Cup as well as the policies enshrined in the Qatar National Vision 2030. Kenneth John Clark, Head of Enterprise Banking at CBQ, while addressing a workshop in Qatar recently said, “Our commitment to SMEs in Qatar, through a dedicated unit providing value added services and tailored solutions including workshops such as this one, is a clear testament of our interest to support their growth and success. We will continue to host such events in the future, based on our customers’ needs and as part of our commitment to contribute to the overall Qatar growth story.” “Entrepreneurship is not for everyone. There is absolutely no shame in recognising that one is simply not cut out to start a business. However, for those who have the drive and the determination to make their own way and start a new business, I would say that they should go for it. Life is about risk. And there are always inherent risks in starting a new business. But there needs to be a greater understanding in our region that many of the world’s greatest entrepreneurs were not initially successful. Failure is a part of the game, and there should be no shame in failing if one has given one’s best shot,” Brannon says. There are many things that start-up entrepreneurs can and should do to minimise risk. One needs a good idea for a business to begin with, followed by a realistic and sustainable business plan. “You need to do the proper research and preparation. Of course, one can always benefit from the experiences of others, so it is important to find a good mentor who has already been through the process and perhaps is familiar with your business sector, so you can avoid “beginners’ mistakes”. Do your homework, and learn from others,” Brannon adds.
Funding
access to finance
The contribution of the SME sector to Qatar’s GDP and employement is very low. How challenging is the environment for SME start-ups? Deloitte’s Director of Consulting David Mason explains.
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atar’s National Vision (QNV) defines the long-term outcomes for the country and provides a framework to support the goal of economic diversification. Its aim is to diversify the economy into value-added, non-oil sectors, and invest in long-term sustainable growth, with the desired effect of improving the country’s competitiveness globally. The key to achieving this goal is investing in human capital by encouraging and supporting the development of Small and Medium Enterprises (SMEs). Countries across the GCC and globally have identified the SME sector as a vehicle for job
creation, innovation and entrepreneurship and ultimately economic diversification. The current interest in the SME sector by governments in the region is well founded, as SMEs are a vital economic driver globally. For example, SMEs in the US contribute close to 53% of GDP, whereas their share in the UK is 64% and in the UAE it is 50%. According to Qatar Development Bank (QDB), SME contribution to Qatar is far lower, contributing approximately 15% to non-oil GDP. An even greater concern to policymakers and residents in the region is finding gainful employment opportunities in an economy dominated by SME CONNECT | ISSUE 1
natural resources. SMEs in OECD countries have traditionally been the driver of new businesses and are strong contributors to employment. In both the US and Europe, over 70% of employment is through SMEs. Again, this figure is much lower in Qatar, where SME contribution to employment is roughly 20%. These figures not only suggest that the SME sector is not fully developed in Qatar, but highlight the relative inefficiency in terms of SME GDP contribution, predominately due to the sectoral mix of SMEs, where over 50% are in the wholesale, retail and trade sector. These statistics highlight great opportunities for both existing SMEs and new start-ups. However, significant challenges remain and urgent attention is required to address key policy, institutional, legal and regulatory gaps in the SME ecosystem. One of the key challenges is facilitating access to finance for SMEs. Access to finance is an issue for SMEs globally, and is often cited as the biggest challenge encountered by SMEs. According to the Global Competitiveness Index Report 2013-2014, access to finance has been identified as the most problematic factor for doing business in Qatar. While there is liquidity in the Qatari market, businesses rank access to finance as an important issue, indicating that the structures that enable access to this liquidity need to be strengthened. A recent white paper by Deloitte for the Khalifa Fund analysing SME financing in the UAE, highlighted that there are both supply (the finance) and demand (the SMEs) challenges. Similar issues can be identified in Qatar. Finance for SMEs varies depending on the stage of maturity, and different financial products/solutions are needed accordingly. On the supply side, many banks in Qatar offer services specifically targeted to SMEs. However, approximately half of the SMEs in Qatar do not have an active banking relationship, which is an immediate barrier to finance. Bank lending to SMEs in Qatar as a share of total lending is 0.5%, which is substantially lower than other GCC countries. Lending to SMEs is risky, especially if they are in the start-up phase. According to the International Monetary Fund (IMF), financing obstacles persist as commercial banks are still reluctant to lend to SMEs, due to the small size of the market, its high risk and set-up costs, the absence of a legal structure for quick arbitration, and lack of SME-specific credit rating in the Credit Bureau.
“However, significant challenges remain and urgent attention is required to address key policy, institutional, legal and regulatory gaps in the SME ecosystem. One of the key challenges is facilitating access to finance for SMEs.�
With these obstacles, it is understandable why banks are risk averse toward SMEs. QDB is responsible for industrial and private-sector development. The bank provides funding assistance to start-ups and existing businesses in the private sector by offering competitive interest rates and other terms such as lengthy repayment periods. Funding is made available through direct facilities from the bank or in the form of guarantees. Another offering from QDB, aimed at SMEs, is the Al-Dhameen programme, which is a loan guarantee scheme for start-ups. This scheme guarantees up to 85% of loans made by private banks to SMEs. A number of banks have now partnered with QDB to deliver this programme. The benefit of loan guarantee schemes is that it removes an element of risk to the banks, but they still have a stake. This ensures that the SME receiving the finance through this mechanism still have a viable business model. Such schemes should provide a stimulus to bank lending. Bank lending is not always the most appropriate form through the four stages of the financing process. For example, seed-funding and angel investment are traditionally mechanisms used in the seed and start-up phases; and venture capital in the emerging growth and development phases. (See stages of the SME Financing Process). However, there are limited financing options for SMEs in Qatar beyond commercial banks. There is an urgent need for venture capital and business angel networks in the country, to broaden access to finance options. From an SME perspective (demand side), access to finance has been identified as the most problematic factor for doing business in Qatar, according to the Global Competitiveness Index Report 2013-2014. The process of getting finance from banks can be bureaucratic, costly and time consuming. This is evidenced through the World Bank’s Ease of Doing Business Index (see chart 2). In order to get finance from banks, a number of documents are requested, including financial statements, cash flow statements, and feasibility reports (if applicable), to name a few. Not only do many SMEs not have all the required documentation, many SMEs do not fully understand the loan application process, as procedures and regulations are not always clear. Enterprise Qatar, a government body providing a one-stop-shop for entrepreneurs and SMEs has a key role to support SMEs in accessing
Stages of the SME Financing Process
start-up phase
emerging growth development
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seed phase
finance. The JADWA Services programme, recently launched by Enterprise Qatar, is an example of how it is enhancing its support to SMEs in securing the capital it requires. The objective of this programme is to assist Qatari businesses in obtaining subsidised professional consultancy services. The purpose of this programme is to assess the viability of new business ideas and opportunities, and to develop SMEs through the undertaking of feasibility studies and business plans. The intended purpose of this program is to assist in the sustainability of the SMEs involved and also assist them in accessing finance from banks and other financial providers. This is a step in the right direction in supporting SMEs, but to increase the country’s ranking in ease of doing business and to increase opportunities for SMEs to access finance, much remains to be done. This is not only in simplifying the process of SMEs accessing bank finance, but also in terms of identifying funding gaps, and for the government to fill these gaps where a market failure is identified. This will stimulate the market, increase demand, and subsequently attract private sector investment. Examples of where the government could help in diversifying the financing mechanism could include the introduction of a proof of concept fund, supporting the development of an angel investor’s network and establishing an early stage venture capital fund. Alongside increasing and diversifying funding options, SMEs need to continue to be educated on how they become “bankable”. Many SMEs need financial management training - preparing reliable financial statements and financial projections. An increase in programmes offered by governmental and non-governmental institutions that train new and existing SME owners on how to launch and manage their businesses would have a positive effect on an SME securing finance. In Deloitte’s experience, support for SMEs should not simply be in assisting them in accessing finance, but also in supporting them once they have the finance. Providing continuing support for businesses at this stage can help increase not only their chance of survival, but also help them grow. Such support can be achieved through a variety of means, such as mentoring, coaching programs and non-executive director schemes. Global examples identify how such schemes can have a positive impact on SMEs. One such example is Enterprise City, a high growth potential
coaching programme run by Deloitte on behalf of Birmingham City Council, which supported over 300 businesses during the programme. An independent evaluation of Enterprise City (GHK, 2012) estimated that by 2015, the program would generate a gross value added of £5.43 for every £1 of public money spent, which relates to a total of £7.7million. The report identified that this represented good value for money, and supported the growth of companies and generated employment opportunities. Continuing to improve the SME ecosystem is of critical importance to Qatar’s long-term economic development. As we have identified, steps have been taken to address this issue through improvements in access to finance, but it is also clear that there is much more to do. Only with both the public and private sectors working together can opening up access to finance for SMEs be achieved, which will contribute to the economic growth and diversification of Qatar.
David Mason is a Director of Strategy for Deloitte, and has been based in Qatar since April 2012. He has extensive expertise within the business support, and skills and economic development arenas, in particular designing and delivering business support solutions internationally.
ease of doing business index, world bank 2011 1 = Most business friendly regulations
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saudi arabia
29
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uae
40
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qatar
SME CONNECT | ISSUE 1
expert talk
Start-ups, Rise and Shine! Qatar is providing a galore of opportunities for the Small and Medium Enterprises (SMEs) to grow, initiating several legislations to reform the financial sector to attract more foreign companies looking to launch their operations in the country, says Grant Kirk, General Manager of the Link Group Qatar, which is specialised in company formation, rendering legal assistance in setting up a commercial firm in the country.
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n an exclusive interview with SME Connect, Kirk says that since the government is concentrating more on the growth of non hydrocarbon sector, there is wide scope for local and foreign firms to explore areas like retail, education, sports and health. “To achieve success, the investors should ensure that their product is localised in tune with the Qatar National Vision 2030,� he says. What are the challenges that SMEs and startups face while setting up a business in Qatar? The biggest challenge for any business, but particularly for SMEs and start-ups, is the start up costs for a legal entity in Qatar. Another challenge is getting expert advice to assist with feasibility studies so the business can devise a business plan. Having said that, the Qatari government does recognise the importance of SMEs to boost the
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economy and innovation and so it is trying to improve the ecosystem for these types of businesses. Enterprise Qatar’s initiative helps to provide financial support and advice to the SME market and we would encourage any start-up or SME operating in Qatar to get involved with this organisation. In your opinion, how can setting up a business in Qatar be easier/more efficient? In Qatar, there are myriad service providers helping to establish foreign companies, but in our experience, too many exploit what is an evolving process to create overly dependent client relationships. This short-sightedness and lack of transparency causes confusion and is a deterrent for foreign companies wanting to set up their businesses here. We believe a screening process for facilitators
of company incorporation services could significantly reduce the time it takes for foreign companies to enter the market and could also contribute to the improvement of trade and investment flows for the country. What is the approach The Links Group is using to help foreigners looking at establishing a company in Qatar? The Links Group provides a unique approach to onshore company formation in which the 51% local ownership requirement is fulfilled by a corporate entity as opposed to an individual. This model affords the highest levels of transparency and stakeholder protection, in accordance with the Qatar Commercial Companies Law, while ensuring the foreign firm retains operational control of their business. Since you have been focused on Qatar for quite some time, what according to you is the next big sector that can be explored by new entrepreneurs and SMEs? Qatar is one of the most prosperous countries in the world and has the fastest growing economy in the GCC. The country is engaged in a strategic push to diversify its economy away from the sale of its finite natural resources and into more sustainable income models, including global financial investments, the creation of tourism and sporting event destinations, a world-class carrier in Qatar Airways, and the creation of a global financial hub. There are myriad opportunities for SMEs across a multitude of non-oil sectors. For instance, the retail industry has been one of the fastest growing sectors in the country. With increasing internet penetration, consumers in the country are gradually becoming increasingly media-savvy and showing an inclination towards online purchasing. Group-buying websites are proliferating across the world and have also found favour among GCC consumers. Another important sector is the food industry. Due to water shortage and a lack of arable land in Qatar, the country needs to import the ma-
jority of its food requirements. This dependence on food imports is expected to increase rapidly due to population growth, increased per capita income and a resulting increase in per capita consumption. In addition, Qatar has set in place a series of regulatory and legislative programmes to reform its financial sector in order to attract more participation from foreign entities, as well as to encourage growth in the SME sector to provide a self-sustaining base for the local economy. The Qatar Financial Centre has also made progress in creating a niche identity as a global hub by including in its offerings specific focus on financial sectors such as the insurance and reinsurance markets. Education and healthcare have also been prioritised by the Qatari leadership as important sectors for development. Opportunities abound for businesses of all kinds, but those that will fare the best are those that ensure that their product is localised for the Qatari market and aligned with Vision 2030. As an allied sector, these SMEs can become partners in the various construction projects in the country and contribute their mite for their successful and timely completion. Can you tell us about The Links Group services in Doha? Established in Qatar in 2006, The Links Group is a premier company formation specialist advising corporations and individuals on how to establish a legal commercial presence in the country. We provide an unrivalled network of corporate services to assist the company formation process. This includes company formation, legal structures, licenses and visa documentation, serviced offices, resource management and marketing support. The Links Group difference is that foreign companies work with a highly structured board as their local partner as opposed to an unknown individual. This unique structure provides foreign businesses with a corporate entity to act as their nominee local partner, shareholder or sponsor, thereby minimising the risks associated with appointing an unknown individual nominee.
Advice for start-ups and SMEs in Qatar
Keep audited reports: It is best to audit your financials from the outset. Even though you may not have an immediate requirement to source external funding, such reporting discipline protects the business and will stand you in good stead should a future funding requirement arise.
Listen to the market: Always heed what your customers say. Make sure you spot customer trends and market changes and be quick to act on them otherwise your valued customers may look elsewhere.
Keep an eye on the market: Be aware of change. To achieve success in business, you must be able to adapt your goods and services to different climates. What worked for you last year might not this year. You have to be ready to embrace new ideas, grow your business and welcome new people.
Get connected: Maintain and build your professional network to learn from business peers. Go join business councils, attend industry events, seminars or connect with the professional groups on LinkedIn.
Grasp the Opportunity: It is important that you demonstrate a willingness to ‘fit in’ while remaining assured and confident in order to fully grasp the opportunity. Take bold decisions, they can reap rewards! Think on a wider scale, could your business work in other Middle Eastern markets? And importantly, are you aligned with the economic vision of the country.
The writer is the General Manager of the Links Group Qatar and has vast experience in business development and has served in senior management positions in different market sectors.
Some of the major projects coming up in Qatar for SMEs and foreign companies
63.7 Hamad International Airport QR63.7 billion ($17.5 billion).
145.6 Railway network
26.94 Deepwater Seaport QR26.94 billion ($7.4 billion).
618.8 FIFA World Cup in 2022 QR618.8 billion ($170 billion).
178.36 Qatar National Vision 2030 QR178.36 billion ($49 billion).
QR145.6 billion ($40 billion). (Source: Link Group Qatar).
cover story
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‘‘How much would you pay me for an idea in my head?’’ SME Connect explores the technology start-up ecosystem in Qatar – what’s working, what’s lacking and where is it going? By Ayswarya Murthy
SME CONNECT | ISSUE 1
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country, even one as small as Qatar, can be characterised by various diversitiestraditions vs. modernisation, fundamentalism vs. moderation, conformity vs. individualism or you vs me. But there are times when a national goal takes precedence over everything else and everyone can associate with it. These are the times that bring citizens together and instil pride, focus and, determination in each individual. The space race of the 1960s did that for the Americans. For Qatar, it will be the drive towards a knowledge-based economy. This implies encouraging and investing in innovations, bringing about a change to the traditional business mindsets and most importantly, letting ideas take flight. All this can be achieved by empowering small and medium enterprises (SMEs) since every new enterprise starts small. While Qatar is trying to shake off its “trader mentality” and take a giant leap into the new age, there is a long road ahead. A survey by Silatech and Gallup last year revealed that one in three Qatari
“Qatar is providing one of the best possible environments for such technology establishments on all levels.” Naim Yazbeck Country Manager, Microsoft Qatar
nationals (33%) in the age group of 15-29 want to start a business in the next 12 months- the highest percentage in the Arab world, where the median is 9%. A testament to this is Abdullatif Al Kuwari who wants to equip taxis in Doha with tablets, providing passengers with helpful and engaging "infotainment". He, along with his team stood second at the Startup Weekend competition last December. Interestingly, he is an 11th grade student. “Right now our plans are on hold. The fact that we are underage is kicking up funding and legal issues,” he says, “We are just waiting to turn 18...” The great Qatar start-up story Luckily for Al Kuwari and others like him, there is a tangible, albeit slow, change in the way tech startups are being perceived in the country. ictQATAR, QSTP, Silatech, Enterprise Qatar, Microsoft and others are leading the way in improving the ecosystem and making it more conducive for young innovators to convert their ideas 28
into businesses. One one hand, networks are being built from the scratch. Furthermore, mentoring and advice is enthusiastically given and received. Today, there are regular events organised by the Enterprise Qatar, Bedaya Center and Roudha Center to bring entrepreneurs together to discuss their common challenges and how they are working their way around them. Start-up competitions are a dime a dozen - 3 Day Startup, MIT Enterprise Forum Arab Startup Competition, Al Fikra, Startup Weekend, Injaz. Winners take away more that cash money; the associated visibility, connections and support that come with mere participation, is invaluable to new entrepreneurs. Incubation centres like the ones in ictQATAR, QSTP and Qatar Business Incubator are supporting young companies through their turbulent initial stages. Financiers are being coxed and coerced into putting the money on start-ups. The sun is rising in the horizon. “I believe that Qatar is providing one of the best possible environments for such technology establishments on all levels. Earlier this year, Microsoft Qatar entered a partnership with ictQATAR and Silatech to develop and deploy weband mobile-based employability portals across the Arab region – “Ta3mal” – which aims to provide new jobs and entrepreneurship opportunities to over a million young people throughout the Arab World over the next five years,” says Naim Yazbeck, Country Manager of Microsoft Qatar. Even with all this, it’s a tough uphill battle. Diana Al Dajani, who runs edutechnoz.com, a website for children that teaches Arabic in a fun, interactive manner, is a one-woman army. Barely a few months after she emerged runner up at Enterprise Qatar’s Al Fikra Competition and the winner of the Best of Entrepreneur award at MITEF, Al Dajani has re-launched her website (which till now was running the beta version), added new features and expanded to the other regions of the GCC. “The prize money definitely helped. And I actually met a mentor at one of these events who was keen on helping me expand in the UAE,” said Al Dajani. The press coverage and subsequent attention from private financiers didn’t hurt either. “The exposure opened so many new doors for me,” she added. Though Al Dajani is doing just fine, being part of an incubator would have helped her immensely. “When I apply for an incubation programme and they ask me in my application what services I’d require, I am going to check all of them,” she laughs. “When you are a start-up, you have to take all the help you can get,” she noted. Razan Suliman, Founder of Bylens, was fortunately selected for incubation at ictQATAR. Her company focusses on the distribution and production of stock images and serves Qatar’s business network of both editorial and commercial clients. Being the only online stock photography website in Qatar (modelled on Shuttestock, Corbis images and the like), Bylens was a breadth of fresh air for companies using ran-
dom Arab images that had little connection with Qatar. “Most online photo libraries are with Emirati models and the difference between a Qatari thoub and Emirati thoub is huge,” she observed. So Suliman came up with a great idea and the incubation centre supplied the rest – accounting, legal and logistical aid, funding, internet, space... whatever is needed. Despite this, Suliman says that the fear of instability didn’t pass for a long time. “The lack of revenue and not knowing whether we would be able to make ends meet was debilitating,” she said. And the negative attitude of those surrounding her only exasperated things. “At first people thought it won’t work and there was no place for such a business. So we kept company with people who would support us whether our business succeeded or failed. This gave us the room to build a business without worrying about what our peers were thinking.” Just imagine battling these kinds of odds without the “village of support systems” that an incubator provides. Taking the plunge is scary enough with people around you not believing in you and your ideas. So, though there are pockets of individual and entities trying to speed up the evolution of how we think about businesses, it’s a lopsided battle against the forces of the old world that are unfamiliar and unreceptive to the intangible nature of tech enterprises. It’s a two-way street The biggest gripe among potential tech czars in that funding is not easy to procure in the country. It is hard to imagine that in a country like Qatar, with abundance of wealth and the highest per capita GDP in the world, that something as pedestrian as money would be a problem. Ironically, it is. “Lenders here are very conservative and don’t really understand service. Loans are easy enough to come by when your products are tangible, but if they are not, then be ready to fund your business from your own pocket,” said Nabil bin Aissa, founder and CEO of QPay, a payment processing firm. There is no denying that the angel investor and venture capital culture in Qatar is premature. Largely used to “lifestyle entrepreneurship”, fundamentally based on trading, the community is still struggling to understand “innovative entrepreneurship”, even on the policy level. The law that a new entrepreneur must lock in QR200,000 to start a new business is one such glaring example. It, sadly, is not a big surprise that Khalid Aboujassoum claims that his biggest challenge in getting his company off the ground, was changing the mindsets. “Investors don’t understand how you can start a business with just an idea and QR200 or QR2000,” said Aboujassoum, the founder of ibTEChar and the winner of the first Qatari Stars of Science. He also added that the new generation of entrepreneurs is burdened with creating awareness and communicating the value of
“Every small decision I take carries the weight of extensive research that went into making it.” Diana Al Dajani Founder, Edutechnoz
institutional knowledge. Aboujassoum, undoubtedly, is the poster boy of the young entrepreneurs in Qatar – articulate, level-headed and clear-thinking. His brainchild, ibTECHar, aims to integrate technology into education. “Today’s classroom is the same as the classroom our parents and grandparents studied in. We want to revisit the system and see if there are better ways to deliver information using technology. And this is not about just putting an iPad in front of every student,” said Aboujassoum. After winning the QITCOM Innovation Competition, his company was selected for incubation by ictQATAR, one of the first companies to be part of the programme. Today, there are at least a dozen other companies sharing office space with him. He is close to the end of the two-year programme and he says it has been a fruitful partnership. “We are all growing together,” he observed. He further added, “ictQATAR gave us resources and support and in turn they learnt from us first-hand how small tech companies work. They are starting to realise the potential of knowledge-driven enterprises and the huge role they are going to play in the economy we have envisioned for the future and the Qatar National Vision 2030.” However, he admits that a lot more needs to be done adding that it
“We kept company with people who would support us whether we succeeded or failed. This gave us the room to build a business without worrying about what our peers were thinking.” Razan Suliman Co-Founder, Bylens
SME CONNECT | ISSUE 1
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“Investors here don't understand how you can start a business with just an idea and QR2,000.” Khalid Aboujassoum Founder, ibTECHar
needs collaboration from all the stakeholders. “But entrepreneurs first have to start creating value for the funding agencies to understand it,” he said explaining the vicious circle. “Young innovators complain about lack of channels of funding or helpful policy while hesitating to take the first step. These bottlenecks hold them back and they do nothing. Investors in turn say ‘you have just been shouting about receiving no help; show me what you have done first’. It’s a paradox involving both parties where everybody loses.” His solution: Put in the effort and someone will notice. “If you really believe in your idea, take some time off work. Cut down on vacation. Create something. And people will see. Money comes with value creation. It’s been done before. You are not reinventing the wheel,” he said. Al Dajani is a shining example of this principle. When Al Dajani was asked how, as an entrepreneur, is she innovating her business practices, she said that she always focuses on minimising price tags at every turn. To do so, she always tests everything on a small scale before rolling out the development or the project. "I always dip my toes in the water before jumping in," she says. Also, she often had to get "greasy" (i.e. being able to do it yourself ) to keep the business alive. "When outsourced developers or interns couldnít complete the job on time, 30
or when they would charge beyond the budget for developing a specific task, I would finish the coding myself (thanks to my background in computer engineering)." When it comes to business development and sales, Diana innovates, by partnering with agents in different parts of GCC, MENA and Europe. "The decision to go with commission-based relationship with agents made the most business sense where expanding investments are being minimised by utilizing agentsí current staff (Sales and Support) and customer base in their assigned territories. Every small decision carries the weight of extensive research, mentoring, learning and guts that went into making it." The changing tide Aboujassoum says that the change is taking place at every level – grassroots to government. Some of the antiquated practices might get some respite with the passing of the new Commercial Law which is under review at the Council of Ministers. “You’d no longer have to show funds of over QR200,000 if this bill passes,” he said. “Taking into account Qatar’s economic history, the fact that such a law exists is understandable but people at the policy level now realise that this has to go,” he added. Entrepreneurs too are showing great initiatives, they are braving the odds and grabbing at any and all the straws, signing up for online support systems such as BizSpark and Keep Your Business Moving. “Bizspark provides software, support, visibility and networking opportunities to more than 50,000 entrepreneurs and business startups in over 100 countries,” says Yazbeck, adding that Microsoft is now also offering ‘Office 365’, that allows small and medium businesses to utilise advanced cloud-based, cost-efficient software, free of charge to any NGO in Qatar. “Moreover, many schools and universities already have designed programmes to support their students’ ambitions, like the CNAQ, VCU-Q, among others.” For Qatar’s nascent entrepreneurial community, the tide is undoubtedly turning in its favour.
branding
The power of why
Branding is vital for SMEs says Anthony Ryman
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here are many statistics out there in today’s over-stimulated, information-rich, super electronic highway called the internet. Today’s small business owner has a good chance to make his/ her business work by leveraging information and knowledge from this one-stop shop. And yet, despite the best will in the world, eight out of 10 new businesses fail in the very first year. Admittedly, this is a general statistic and I point you to an article in Forbes titled "Five reasons eight out of ten businesses fail". The history of work over the last 50 years mirrors the evolution of our developed society. We ramped up mass production after the war years, utilising the machinery that made war parts to now make consumer goods. Mass production succeeded in stimulating demand to own luxuries such as a car, a refrigerator and a TV as bare neccessities thus, reinforcing the need for further mass production. What started with 30,000 products on the supermarket shelves, turned into 120,000 products. Mass production has met with so much success that it is evident from a mere breakfast cereal shelves that has a plethora of myriad of packaging screaming at you to “buy me”. One result of this over-saturation of mass-produced food has been the return to ‘slow’ food, the rise of organic food and the hunger for more exotic
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individualised foods appealing less to sustenance and more to lifestyle. This example defines a new macro-trend emerging towards a more inner-directed expression of desires based on a person’s sense of self, rather than on the traditional principles of needs and wants. And this is where brand comes into the picture. Brands are perhaps, the single greatest gift that commerce has ever given to our culture. It’s a shorthand for identifying our people, our tribe. In the time it takes for synapses to catalyse and release neurotransmitters, we’ve made our judgment about most things in life: whether you’re friend or foe, target or enemy, the main thing or just wallpaper. Brands have become the most important differentiator, whether for mere impulse purchase or high-ticket item. One can go through the 5 P’s, and quickly compare. You do your comparison internet shop, and ask around, but in the end, most people opt for the brand that defines who they are or who they want to be. Brands today are used as • “emotion” • “asset value” • “tribe” or “identity” – defining who you are/want to be
By sporting a particular brand, one makes a statement about his/her personality. So we had ‘bling man’, ‘chav lady’, ‘yuppie’ and ‘wannabe’ titles given to people to categorise them. Because that’s what brands do to you. They define you as you wear them, drive them, eat or use them. So it is important for you, a small business owner, to have a clear understanding of what YOUR brand is all about. And yes I mean your brand, rather than that of the product or service that you’re trying to set up. The first law of brand for SME’s is to ask yourself the question, WHY? Why are you doing this? What’s your motivation, driving force, key principle, purpose, passion and vision? Read this again and answer them truthfully. When the going gets tough, and it will, these answers, focussed and clear, are what will keep you going. The answers to WHY creates your value system that drives your belief in yourself and your passion in what you’re doing and will also enable others to believe in you. This sense of self ownership is your brand story or DNA that influences the product or service brand you are creating. It’s your differentiator that affect perception of people around you about you and the product or service you are selling. Because its people’s perception of you, based on what they hear, see, feel and, most importantly, experience which creates and reinforces your brand story or DNA. So the first principle: Get to the why. If you understand why you’re doing what you’re doing, then you can communicate this clearly, authentically and honestly; people can trust you because they understand you and trust builds belief and loyalty. And you have a better sense of who you are and what your company is about. Then you have to ask yourself these key questions about your company’s products or services: • what (are you selling), • how (are you selling it), • who (are you selling it to) • what you stand for (the why of it all) that makes you different, special or unique. This will give you the core sense of your company’s identity to position and differentiate your
company’s brand, while establishing core values and differentiation to set you apart from your competitors. Your core values come from the why. They define you, giving you a sense of self and help you define your purpose and objectives. Your differentiated values set you apart from your competitors - giving your customers a reason to believe in you and associate with you and what you’re doing. And so a link is created between who you are, what you’re doing, how you’re doing it (and why you’re doing it) and customers’ perception and experience of you and your brand. It’s your brand promise associated brand values that drive the consistency of how your brand is perceived through the customer experience and it’s this consistency from expression and communication to experience that builds loyalty and advocacy - your brand tribe. Your brand tone of voice expresses your style and personality and helps to develop the communication platform, thereby reinforcing your brand positioning through its expression. It must reflect and communicate the heart and soul of the business (your brand) at every touch point, so it’s important that all staff ‘get it’ and can be inspired to live your brand values every day. It’s this emotional relationship between you and your brand that helps people to believe and trust you (and buy your product). Consistency of experience reinforces this. Finally, the visual expression of a brand through its logo. My experience of running a Qatari-born, multi-award winning brand consultancy is that companies large and small focus too much on the look and feel of the visual device (the logo) and not enough on the strategic “imperative” (the why or purpose) that drives the brand. The development of a powerful brand is a journey. It’s not a quick fix. Developing, promoting, communicating and expressing a culture of purpose is going to ultimately make the difference between an ordinary and a great brand. Great brands build tribes by connecting with customers. Remember, 80% of a customer’s purchase decision is based on emotion, not logic! You deliver an experience through the relationship with your product or service that resonates with customers’ imagination, their desire for self-expression and their perceived needs and wants. Great brands reduce customer acquisition costs by creating advocacy, loyalty and trust and increasing share of voice and market, ultimately delivering increased bottomline profits and tangible brand equity. You’ve got to offer a compelling “why”. It’s the beginning and end to what you do. It’s the game changer. Get it right and you have an extraordinary business proposition. Get it wrong and you’ll remain a ‘me too’ company that could become a statistic.
"If you understand why you’re doing what you’re doing, then you can communicate this clearly, authentically and honestly; people can trust you because they understand you and trust builds belief and loyalty."
Anthony Ryman is Managing Director of grow, a refreshingly creative Doha-based advertising and design agency focused on brands. For more information please go to http://www.growqatar.com or email anthony@growqatar.com
SME CONNECT | ISSUE 1
expert talk
Use SMEs to nurture local talent Perceived wisdom says that Small and Medium Enterprises (SMEs) in the Gulf region do not want to employ nationals and that the locals do not want to work in SMEs, says Nick Edmunds.
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he line goes that small and medium size enterprises are built on formal and informal affiliations of other SMEs Subject Matter Experts. To be successful, SMEs (in both senses) must have a high ratio of billable expertise to back office staff, must use flexible terms of employment to deal with changes in their market and cannot rely on either junior/relatively unskilled staff requiring training and mentoring or on nationals whose legally enforceable terms of employment mean they are less easy to hire and fire. SMEs are, therefore, predominantly expatriate-led with lower paid administrative staff
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drawn from outside the region and are, by their nature, a less sure bet than bigger entities in terms of long term success. Furthermore, a plethora of research suggests that locals like to work in large enterprises where there is a clear career path incorporating comprehensive personal development programmes and the feeling of job security which comes from employment in a big organisation. There are two further factors which suggest that SMEs and locals are NOT a marriage made in heaven. Firstly, for those who suspect that legislation only exists to enforce behaviour that is contrary to what people would otherwise choose, this “truth�
is emphasised when one sees the raft of “nationalisation” legislation rolled out by governments looking to create alternatives to the public sector. Secondly, there is a very crude but nonetheless economically accurate standpoint which says that disregarding all longer term factors, the energy producing Gulf countries do not need to develop an SME economy and could easily rely on substantial revenues generated by large energy companies to comfortably support their populations for the next few decades. Not much of this is actually true. A combination of new sources of energy, new means of recovering those sources of energy, a global move away from carbon fuels and/or ecological factors driving technological advances towards more use of renewables and more efficient use of carbon fuels means that Gulf countries can no longer rely on energy reserves to provide long term revenue. Furthermore, even the best performing sovereign wealth fund portfolios can only deliver cash and cash is not enough to meaningfully sustain either a large public sector or an unwieldy set of large private or semi-government bodies, nor is it the same as employment when it comes to happy population and long term stability. So SMEs are not just nice to have because economists say they are the driving force behind any mature or maturing economy, they are a musthave and governments are probably right to take an enforcing stance in terms of getting those SMEs to employ the locals. This probably looks quite bleak, with the growth of SME economies based on enforcement rather than desire, but once again the statistics suggest otherwise (Let's agree that positive relationships always work for both parties AND that the vast majority of SMEs here actually have the option to go elsewhere). It is worth noting that, according to the Donor Committee for Enterprise Development (DCED), there are an estimated 125 million SMEs globally. Of these 89 million, that is the majority, exist in emerging and frontier markets. The Middle East and North Africa (MENA) account for 5 million of these and rank 2nd only to Latin America and the Caribbean in terms of numbers of SME per 1000 of population. Dubai alone, which admittedly is probably the most advanced of the Gulf sub-states in terms of creating the conditions to support an SME economy, estimates that 95% of its total enterprise population is made up of SMEs and that those bodies are responsible for about 40% of its “value add”. So the reality is that MENA economies are
becoming good at supporting SMEs, and by inference, that their governments are already creating the policies and conditions which allow SMEs to thrive and, that if they weren’t, the SMEs would have gone. Governments are beginning to enforce policy regarding the employment of nationals in SMEs but they are also creating policy to support those SMEs and, although numbers of nationals employed are still comparatively low, those SMEs are thriving because of, not despite, the conditions that the governments have created. The question is not whether companies should employ nationals but how they look to harness and nurture local talent to drive greater mutual success. Stephen Hertog’s excellent paper on the challenges and opportunities for SMEs in the GCC lays out the challenges as follows: • Bureaucracy • Access to Finance • Marketing • HR • Technical knowledge • Innovation, Business Planning and Management So, if mutual success is the aim, maybe the best approach is to look at a process where the employment and nurturing of locals can help overcome these: • Recognise the skills that nationals already have and utilise them. These include language and knowledge/inherent understanding of government structures and processes which can help the SME deal with bureaucracy. • Invest in training which is specific to your sector or the role that you wish your national employees to fulfill. Make use of any government funding that is available to nationals for specific skills training. Consolidate that effort with on the job application so employees understand its relevance to the actual workplace. This will improve both technical knowledge and employee engagement. • Involve local staff in business planning and consider rewarding strong performers with equity or some form of clear convertible incentive. Government initiatives giving preferential access to finance for SMEs incorporating national staff ownership in a meaningful way already exist and will continue to evolve. In short, recognise that mutual success for SMEs, nationals and governments is based on all parties working together.
“So SMEs are not just nice to have because economists say they are the driving force behind any mature or maturing economy, they are a musthave and governments are probably right to take an enforcing stance in terms of getting those SMEs to employ the locals.”
More about the Guru
Nick edmunds Founder and CEO, Aldridges Nick Edmunds is the founder and CEO of Aldridges, a UAE-based company focussed on helping companies find, win and deliver business in the Middle East and Africa. Over the course of the last decade Nick has worked for both government entities and private companies and has delivered projects throughout the UAE and wider Middle East. His website: www.aldridges-group.com
SME CONNECT | ISSUE 1
wacky design
Driven by design Rabih Ghandour, CEO, Fanta addict, coding prodigy and daydreamer among other things, talks to SME Connect about his e-commerce website Wamli, a marriage of geeky charm and cutting-edge design. By Ayswarya Murthy
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amli is not your run-of-the-mill e-commerce site. Founded on 12.12.12 in Dubai and conceptualised by a “small team of geeks” who wanted to create a social e-commerce platform from scratch, Wamli is “an art + design based platform that celebrates unique products from established designers in their particular arena” according to Chief Executive Officer, Rabih Ghandour. Taking us through the journey from being a “day-dreaming, risk-taking, online geek/college-drop out” to the CEO of Wamli, Ghandour recalls how the concept was born out of his desire to mix game mechanics with social e-commerce. “I approached our current Head of Products Imad Ghandour, who was a head buyer at Beirut Duty Free at the time, and had a passion for design and products. I showed him an early prototype of Wamli and he was immediately convinced,” he says. Later more family members and friends, all geeks and design lovers who fell in love with the
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concept, came on board, aiding with the entire development which happened in-house. Now, a year later, they are shipping to 23 countries worldwide. Sourced from around the globe, products at Wamli are usually discoveries made through the journeys of Imad Ghandour who keeps a lookout for such unique products. He says. “All products on Wamli.com are ones that the entire team at Wamli believes in. Our aim is get visitors to the site live these journeys and celebrate that unique experience.” Not only do the products reflect youth and energy, the company also incorporates gamification to turn customers into “brand ambassadors and collaborators”. For instance, Wamli Coins is the site’s own currency which can be accumulated and used to pay for products. Users can earn eXperience Points (XP) by making noise about the company and sharing information about products and reviews on social networking sites. “This weighted point system measures how active each member is. As the number increases, the user becomes
Wamli is for those of us who don't want a regular comb but a comb shaped like a gun; those who want skull shaped dust caps for their bicycle valves; those who'd loved to sit on a tooth shaped lamp-cum-stool if given the choice; For those who are bored of the mundane want to be around outrageous design, splashes of colour, pure funkiness and a dash of geek chic.
more experienced and earns greater rewards,” the company states. You can even earn “powers” that give users access to free shipping worldwide and concierge services. It’s not entirely surprising that initially when Wamli was launched, the target audience was only the “geeks”. But Ghandour has been pleasantly taken-aback with the ever-changing nature of their buyers’ profile since then. “The average buyers currently at Wamli are design loving individuals like you and me. They range from people who are interested in unique products that can either add a spark to conversations at home to individuals who wish to celebrate their unique identity with products that match they specific tastes,” he notes. The journey hasn’t been without its challenges. Notwithstanding competition from other geeky e-commerce platforms (a tag that Ghandour says they have moved away from over the past year), they had to brave the nascent and still-evolving e-commerce ecosystem in the region. “The major challenges we had revolved around payment processing, cross border regulations and customs, and from a customer point of view, building trust and combating the mall culture,” But he is more than optimistic about his chances here. “I believe this market is one of the best places to start - it is still fresh, with little or no competition, and it is a lucrative market with high
purchasing power. Cost wise, the money needed to launch a start-up here is a fraction of what is needed to launch one in the U.S. or Europe,” he explains. When asked the obligatory five-years-from-now question, Ghandour makes it clear that right now he is focusing on the fundamentals. “Today we are building a strong foundation, a strong community of design enthusiasts, and a scalable and flexible platform with a huge potential. I would like to see Wamli positioned as a globally successful community driven e-commerce platform, and on the forefront of innovation and design. The potential with Wamli is big, and it is only the beginning.” SME CONNECT | ISSUE 1
expert talk
Trend Spotting: Commerce on Facebook Social e-commerce is on the rise, says Sramana Mitra
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ocial media’s impact on global ecommerce is being felt everywhere. By promoting products via social media outlets, e-commerce companies have invited customers to spread interest and awareness of their brands through liking, reviewing and sharing products with their network of friends. Commerce on social media is fast becoming a hot trend. A company that has successfully exploited ecommerce on social media is Bigcommerce, co-founded by Eddie Machaalani and Mitchell Harper in 2009. They are present in over 65 countries, within 25 different industries, and have processed QR6 billion ($1,65 million) in transactions for over 35,000 of their storeowners, generating annual revenues ranging from hundreds of dollars to tens of millions. With Bigcommerce, anyone can create an online store, upload and manage his or her products, and market them anywhere on the web whether through social media, email, blogs or independent
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websites. Free with membership is SocialShop, a free Bigcommerce app, which allows vendors to set up a functioning Facebook shop where friends can browse, buy, and share products without leaving the site. Also headquartered in Austin, Texas, is Volusion, an e-commerce platform vendor with flexible e-commerce software and hosting plans for all kinds of merchants. Created in 1999 from the bedroom of Founder and Chairman Kevin Sproles who began coding shopping cart software, Volusion has over 40,000 online stores, QR36.7 billion ($10 billion) in merchant sales worldwide, and over 360 employees. Volusion also assists vendors with creating a website to showcase their products then integrates it with various marketing outlets, especially through social media. With Volusion’s SocialStore, which comes free with membership, vendors
“Social commerce is inevitably going to drive the future of social media companies. As advertising and commerce start to fuse, advertisers will look for ways to not only pay for eyeballs, but for completed transactions.” can list products directly on their existing Facebook Business Page so that customers can view, purchase, and share their products instantly. But if this kind of native e-commerce on Facebook appears mundane to you, let’s go a step further. A company that wants to capitalise on the social commerce trend and both facilitate and simultaneously complete actual transactions on social media is enMarkit, a platform-independent e-commerce solutions company founded by ex-venture capitalist Vipin Aggarwal and Ekta Mittal, formerly of Amazon. They want to turn Facebook into an exchange for high-trust e-commerce. Imagine that you want to rent your beach house. What if there was a way for you to list it on Facebook such that your friends can see it? And once they do what if they could each rent it for a week? With built-in trust, you then have a closed group of people practicing commerce amongst themselves. Sounds like AirBnB? Why, of course! Except, within a trusted circle. Now imagine that you are looking for a web designer. Very likely, you would go to Elance or oDesk and list your project. But what if you had a way to list your project on a similar exchange on Facebook, and ask your friends for recommendations?
And what if five of your friends recommend the designers they have used. You get to choose the one you like, and then, immediately set up the transaction right there on Facebook. The designer, if he or she does a good job, gets a nice recommendation right there, and with some of enMarkit’s magic, the recommendation could go viral. Welcome to the future of social e-commerce. The enMarkit team has built two enabling solutions: the F.A.S.T. (Fast Anywhere Secure Transactions) check out system is a universal payment link which vendors can use to sell their products on Facebook, Twitter, Google+ and LinkedIn, and ONE, the unified storefront, which shares buyers’ views, likes, bookmarks, comments, buys and reviews amongst their online friends. There are no listing fees, no annual fees, and sellers only pay enMarkit an approximate 5% transaction fee when they actualise a sale. Social commerce is inevitably going to drive the future of social media companies. As advertising and commerce start to fuse, advertisers will look for ways to not only pay for eyeballs, but for completed transactions. The above-mentioned trend of completing e-commerce transactions on Facebook offers clues into how the future is likely to evolve.
More about the Guru
sramana mitra Founder, One Million by One Million Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs globally to reach QR3.64 million ($1 million) in revenue and beyond. A Silicon Valley entrepreneur and strategy consultant, Sramana writes the blog Sramana Mitra on Strategy, and is author of the Entrepreneur Journeys book series and Vision India 2020. From 2008 to 2010, Mitra was a columnist for Forbes. As an entrepreneur CEO, she ran three companies: DAIS, Intarka, and Uuma. Sramana has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology.
SME CONNECT | ISSUE 1
Entrepreneur talk
Automation helps How cloud computing can change the functioning of small and medium enterprises across the world and prevent them from succumbing to manpower attrition? Rajesh Butta explains.
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he advent and popularisation of Cloud Computing is one of the developments that has taken place in recent times with regard to the small and medium enterprise (SME) sector around the world. Cloud computing is basically a concept in which a particular automation application is lying on a remote server somewhere; while users on the desktops are working on those applications to automate work culture in their domain thus helping businesses streamline operations. Let me highlight the key benefits for all the stakeholders involved, the first and foremost being the end-user organisation. Nobody will deny the fact that an automated operation can give huge amount of visibility to various aspects of a business. Besides it makes any company a little less dependent on people. The SMEs have the biggest challenge of attracting and retaining talent. Therefore, a good management would like to lay down work-related procedures and processes in such a way that manpower attrition does not impact its operations. In order to achieve a better control over its operations, any company will have to make best
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use of IT, making it strategically a very important aspect of business. In the case of small businesses, any custom-built software solution is more likely to fail purely because in order to build a customised software solution, the users should be able to define exactly what they need, the developer should be able to understand and interpret the explanation and most importantly, be able to relate the requirement to the actual business operation. Most times, users do not have an understanding on how to define a known requirement in a way that covers all scenarios for the developer. Solutioning is not an easy task. It comes out right only if you ask the right questions from the users of the system and software developers have little understanding on how to interpret the stated and the unstated requirements of a business (most of which is common sense) and at times may not ask the right questions from the users. Mind you, the developers/coders sometimes don't understand very well how the businesses operate. To cite an example, I was once part of a failed customised development project for an importer. The owner was extremely keen to automate his operations but had zero knowledge
on how an application was built and importantly, implemented without being threatening to the people involved. The two key people who were involved in handling the documentation of this business (documentation is the key part of an export import business) were not too keen to have a success out of this initiative, probably because they thought that their dependency will go down in case this software gets implemented successfully. There was always a constant tussle on how the application should be implemented. Our team wanted to implement it in a phased manner so that all the shortcomings are taken care of in the initial stages itself, while the clients’ team wanted the whole application in one go in order to do the implementation. We had to shelve the project after about six months of hard struggle. In the process, everybody was the loser. On the other hand, if there is an application that follows all the Standard Operating Procedures (SOPs) of a business and can be implemented straight-away, will it not be much easier for the organisation? This is what SAAS (Software-As-AsService) based products achieve. Firstly, it is of great benefit to businesses in SME sector purely on the basis of cost advantage. Since the cloud computing applications are available in a SAAS mode, the user organisation has to pay only a fraction of actual development cost on a pay-peruse basis. Therefore, a placement consultancy, as an example, having three users, could make use of an application and pay for them only. The start to automation does not require spending huge amount of money in software licences and costly servers in order to automate their operations not to mention the huge amount of time saved in building the application from scratch. This mode of software implementation is also beneficial to the software companies working in this domain since if the product is good and if there is merit in using the application, then more and more companies would adopt the solution. This would give returns many times more than their actual cost of development. Note they are again mostly SMEs. Hence, a small software company can pick up a domain and built an application addressing the pain points of that domain and then give it away to an organisation for a small fee which could gradually go up with advance usage. I am a great fan of cloud-based application because of one more very interesting reason. It
enables “home-sourcing” of employees. Potential employees and freelancers could work from anywhere solving a lot of problems for small enterprise in the process. These include physical office space constraints and tapping into huge competent human resources who probably can’t get into regular employment because of family and other considerations. Cloud-based applications enable talents like those from getting wasted and being a part of any normal office team. Another key development I want to touch upon, which is a boon for the SMEs, is Social Media Marketing (SMM), which is currently an important part of overall marketing strategy. SMM has been the buzzword for quite some time now. A business can now create great brand equity for itself by playing the social media strategy right, but it is a double edged sword. A disappointed customer has nine times more probability to talk about his experience than the satisfied customer creating a huge amount of negative word of mouth publicity. Many companies have mushroomed, offering social media strategy but much deliberation is required in order to thresh out the overall game plan for going digital. This ingenuity can do more harm than good in the hands of amateurs. But if planned properly, this is probably the single most important game leveller for even the smallest of small enterprises. No wonder start-ups from young entrepreneurs have great emphasis on social media presence. My advice to SMEs would be to definitely refresh some on the marketing concepts before making any start at the social media strategy because all the concepts of marketing are applicable to this comparatively new domain of advertising and promotion. One has to have a pulse of the target segment to which the marketing communication is being aimed at. Being explicit in your social media strategy about your product or service might put off people, because today people in general hate to be told about a product. Any information dissemination is treated and clubbed as selling which is not liked by many. Therefore, the key is in building ‘communities’ around your product or service and serve them with interesting and original concepts, which they feel good about sharing in their social space. These are exciting times where there is ample scope for creativity and innovation. SME sector, I must say, is in right position to encash the opportunities thrown at them.
“Another key development I want to touch upon, which is a boon for the SMEs, is Social Media Marketing (SMM), which is currently an important part of overall marketing strategy. SMM has been the buzzword for quite some time now.”
More about the author
rajesh butta Entrepreneur The writer is a serial entrepreneur, start-up specialist and angel investor in IT, Education, Business Consulting and Social Media Marketing and is based out of Delhi, India.
SME CONNECT | ISSUE 1
case study
efforts to promote entrepreneurship
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ore than 150 students have benefited so far from the Entrepreneurship Centre at College of North Atlantic - Qatar (CNA-Q), which opened in 2010 with a focus on providing services and support to students starting their own businesses, for those looking at entrepreneurship as a viable career option and for those simply wanting to develop their entrepreneurial spirit. These students were actively engaged by two entrepreneurial mentors to explore their ideas, moving some into developing business opportunities - including start-ups. Some of the student ideas include Apps, e-commerce, gaming, research, food industry, web-site development, events planning, transportation, fashion design, beauty care, sports
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entertainment and tourism. The original strategic vision for the Entrepreneurship Centre has evolved steadily and is influenced by cultural realities and the collective missions and mandates of the state-wide entrepreneurial ecosystem; which in itself has moved from conception to genesis in little more than five years. In simple words, the entrepreneurial needs, development of students, and the overall Small and Medium Enterprise (SME) marketplace, are directing the programmes and services being offered to entrepreneurs throughout the country. In addition to providing mentoring services to potential student entrepreneurs and programmes aimed at developing their entrepreneurial spirit, the Entrepreneurship Centre has also
positioned itself as an active member of Qatar’s entrepreneurial landscape. In 2013, a consultant was hired by Silatech to identify the key stakeholders; those who contribute products, services and programmes aimed at encouraging entrepreneurial development and strategically focused on supporting the diversification of Qatar’s economy. Over 100 stakeholders were identified from a broad range of sectors such as education, finance, government, media, sponsors and non-governmental organisations. For those in the Entrepreneurship Centre, it has been an adventure and somewhat of a roller-coaster ride, largely owing to the exponential growth of Qatar’s population, infrastructure projects and expanding entrepreneurial community. As such, the Centre has been fortunate to have experienced a multitude of opportunities, over a relatively short period of time. At the conceptual level, the Centre has offered support to Al Fikra, the Qatar Business Plan Competition, by providing facilities, developing and delivering workshops for participants and participating in a judging capacity. The national competition targets student and professional entrepreneurs, and is a joint effort between government, industry, business and academic partners. Additionally, the Centre has prepared and delivered a number of workshops for private and not-for-profit organisations. In the spring of 2013, the college and the Centre have offered mentoring services during a day-long information technology “Hack-a-thon”, which was sponsored by Enterprise Qatar. Mentoring services were also provided to Carnegie Mellon University Qatar during its 3-Day Startup Challenge (Tech Innovation). This fall, the Centre is actively participating with Bedaya Center, one of its community partners, in the Enterprise Challenge Qatar 2013 (Ethics and Business Simulation); an initiative sponsored by Shell Qatar. The challenge has teams from the academic community competing for a chance to participate in the finals, to be held during Global Entrepreneurship Week from November 18 to 24. Though strategic partnerships and standing agreements the Centre has provided a number of topic-relevant workshops aimed at entrepreneurs in the SME community. Currently, it is involved in the introduction of a coaching programme and a needs assessment research project for SMEs, in
partnership with Commercial Bank. At the strategic level, through networks and partnering initiatives, the Centre has participated and collaborated with state-funded entrepreneurial and economic agencies and a host of world renowned academic institutions such as Qatar University, Texas A&M University Qatar, Carnegie Mellon University Qatar and Virginia Commonwealth University Qatar, in the development of the State entrepreneurial landscape. Member groups are dedicated to pooling and sharing their resources with a view to creating relevant programmes and services and impacting policy for the diversification of Qatar’s economy, the betterment of entrepreneurs and Qatar’s SME community. The Entrepreneurship Center’s active involvement in the entrepreneurial eco-system contributed to CNA-Q winning the Silver Reyada award for ‘Outstanding Entrepreneurial Support’ in 2012. Flowing from its initial strategic direction, offering mentoring services to the student body, staff at the Centre have also taught programme-based entrepreneurship courses, instituted an internal Business Plan and Innovation competition, initiated an entrepreneurial spirit club, arranged guest speakers and provided mentoring services to teams participating in the annual Case Competition. As well, the Centre has provided students exposure to other academic and entrepreneurially-focused institutions. The Entrepreneurship Centre’s primary mandate continues to design programmes and services that spawn an interest in, and develop skills related to each student’s entrepreneurial spirit and endeavours. Certainly it is the hope that one day a contingent of CNA-Q students might well be ‘bit’ by the entrepreneurial bug, becoming motivated to start ventures of their own. Yet what is unique about the college environment, and the Entrepreneurship Centre’s programmes, is students have access to valuable resources which enable them to develop business ideas and explore entrepreneurship, all with a view to develop their own entrepreneurial spirit. Ensuring that graduates are trained in the most relevant practices, CNA-Q has a close relationship with the local industry and more than half of all students are sponsored by local industry and government organisations.
“In simple words, the entrepreneurial needs, the development of students, and the overall Small and Medium Enterprise (SME) marketplace, are directing the programmes and services being offered to entrepreneurs throughout the country.”
More about the author
Peter J Moore Mentor, Entrepreneurial Centre, College of North Atlantic-Qatar. Peter J Moore, a Mentor with the Entrepreneurial Centre at CNA-Q, has worked extensively as a consultant and mentor with Micro and Small business owners. He is well versed in all areas of the business model and his specific area of expertise is Strategic Planning and Business Development. He is an experienced business person and has worked in the Marketing & Advertising field.
SME CONNECT | ISSUE 1
last word
Designer Way
Ibrahim M Jaidah is the pioneer of a new architectural movement, one that combines the far-reaching influences of Islamic art with a modern interpretation to create memorable landmark structures. He left the security of a government job as Head of the Architectural Section in the Ministry of Municipal Affairs & Agriculture to set into the world of entrepreneurship in 1991, acquiring Arab Engineering Bureau (AEB).
How it all started
I believe “Believe in yourself and in what you do. Work hard regardless of the sacrifices and you will reap the produce of your work.�
In 1991, when an engineering company came up for sale, I took a leap of faith and in one day I made the decision to borrow funds and purchase the company. It all happened quickly and within two or three days my life had changed. I was in debt but I owned a company! Within the week I walked into the office (which at the time was located in an apartment building) introducing myself to the six people there as the new owner of the company. At the end of the apartment was a room with nothing in it but a table, which I then cleared and set down to start working.
Inspiring Leader Positive attitude and respect are the two most important virtues of a leader.
My best (buildings, contracts and partnerships) There are many buildings that I consider my favourite but there are those few gems in the bunch which mark the turning points in my career. The current Qatar Foundation HQ building (which at the time was Al Shaqab School for girls) is one of my favorites as it is the first building to be set in the heart of Education City marking the vision of His Highness. This building is also printed on a QR100 note and that is something I will forever be proud of. Another is Barzan Tower. This was my first experience in high-rise buildings, and it was especially challenging to marry local and modern architecture. I was also lucky to work in partnership with some major names in the architectural industry such as I M Pei, Arata Isozaki and Jean Novel.
The dation foun
s mpany’ as the co e come to y staff nsider m the years I hav ig your co to e ugh I lik l or b ion. Thro ter how smal rself. foundat l by you the mat do it al that no sail. At cannot r u realise u yo yo , se is or and ployees enterpri are you anch r 500 em king over aff have ove spea Your st AEB we rent countries pleted more at t en diffe mom e com from 33 We hav coming nt languages. . re till now s 40 diffe ct je 00 pro than 1,5
On being the first Qatari architect I cannot really say I was the first Qatari who came from an architectural background. In the generation before mine there were a few locals who graduated in architecture but because of the lack of highly educated individuals in Qatar they were moved into more managerial roles. I was lucky to have the opportunity to concentrate more on architectural design and this has made me the first Qatari architectural practitioner. This adds extra weight on my shoulders as very often I am being told that I am setting an example for the next generation and paving the way for our young architects, which is a great responsibility.
Stumbl
ing
Ther e many were so many it is im more to com and I am porta certa nt th e. Every in t at yo d u lea ay is a c here are rn fro h m yo allenge, b ur m istak ut es.
lesso
ns
Life lessons 1 2
If you believe in what you do and are honest to yourself, dreams do come true. What goes around comes around. If you are appreciative and giving in your work, you do get rewarded. It does work; it is not just a theory.